Prepare a cost of quality report for bath products ltd

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Reference no: EM132694701

Bath Products Ltd manufactures a variety of bath and beauty products for specialty stores. The company has recently introduced the concept of identifying cost of quality and has identified the following costs for the month:

Rework time $12,000

Cost of defective products that cannot be reused $14,000

Laboratory testing for safety $18,000

Training of quality control supervisors $21,000

Customer complaints $11,600

Inspection of purchased ingredients $7,800

Product liability $1000

Sales Revenue for the month was $100,000.

Required:

Question 1. Prepare a cost of quality report for Bath Products Ltd. The report should include the following information:

Classification of the above costs as internal failure, external failure, appraisal and prevention costs.

Calculation of each cost with respect to percentage of sales.

Calculation of each cost with respect to percentage of total quality costs.

Question 2. Prepare a report for the management of Bath Products Ltd, commenting on the analysis in requirement (1) and providing suggestion for improvement.

Reference no: EM132694701

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